THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.

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[04:30:26] ALISON KOSIK, CNN ANCHOR: President-elect Trump's latest cabinet pick setting a pattern. He's another big critic of the very agency he is about to lead.

JOHN BERMAN, CNN ANCHOR: The president-elect lashes out at a blue collar union boss. The reason, because this man questioned Donald Trump's claims about how many jobs the president-elect says he is saving in Indiana.

Welcome back to EARLY START, everyone. I'm John Berman.

KOSIK: Good morning. I'm Alison Kosik. It's 30 minutes past the hour.

And breaking overnight, President-elect Trump blasting a union leader who's accusing him of playing up the number of jobs that were saved at an Indiana air conditioning plant. We'll have more on that back and forth in a moment and the numbers behind.

Also today, the president-elect gets ready to sit down with retired four-star Admiral James Stavridis who is said to be in the short list for secretary of state. Noteworthy about that meeting is that Stavridis was vetted as a possible vice president pick for Hillary Clinton.

Overnight, the Trump transition team announced picks for head of the Environmental Protection Agency, Oklahoma Attorney General Scott Pruitt. This will be a controversial nomination. Pruitt is a prominent denier of climate science and a fierce critic of the agency he would now run.

For the latest on the transition, let's bring in CNN's Sara Murray at Trump Tower.

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SARA MURRAY, CNN POLITICS REPORTER: Good morning, John and Alison.

Well, the Donald Trump transition barrels on. And while as a candidate on the campaign trail, Trump may have said dismissive things about the generals, he is relying an awful lot on them as he builds out his White House team. A source tells CNN that Trump has chosen retired General John Kelly to be the next head of the Department of Homeland Security. It's just one of a number of staffing issues taking shape this week.

Yet another one the Trump transition team made official is Linda McMahon, the former CEO of WWE. That's Donald Trump's pick to lead the Small Business Administration. And a source tells me that Donald Trump is impressed with her business experience. That's part of the reason he felt she was the right pick for the job.

Now, he won't be spending all day Thursday cloistered in Trump Tower. He's going to be heading out to Ohio where he'll be meeting victims and first responders in Columbus around that Ohio State attack and then, he's going to be going on to Des Moines, Iowa. That is, of course, a state he won that helped him fueled his trip to the White House, part of his victory tour and also an opportunity to reveal yet another one of his staff picks, Iowa Governor Terry Branstad, and that's Donald Trump's choice to be the next U.S. ambassador to China.

Back to you, guys.

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BERMAN: All right. Sara Murray, thanks so much.

Let's talk about Governor Branstad of Iowa. He is known to have a close relationship with China, including a decades long relationship with the Chinese President Xi Jinping who believe it or not, himself has long ties to Iowa. This really is seen as an olive branch outreach to China from the incoming Trump administration.

I want to bring in CNN's Matt Rivers live in Beijing.

You know, when I saw the regime in China actually refer to Governor Branstad as an old friend of China, which is actually, you know, loud praise from that nation.

MATT RIVERS, CNN POLITICS: That's absolutely right. Being called an old friend or lao peng you in Chinese is actually a sign of really endearment here. You heard that from a spokesperson at the ministry of foreign affairs at a regular press conference. And it's odd in and of itself to hear Chinese officials actually comment on specific individuals.

So, this is very high praise coming from the Chinese government. And it makes sense, given the fact that Governor Branstad has known President Xi Jinping since 1985. At that point, a 31-year-old Xi Jinping went to Iowa as part of the agriculture fact finding mission. There, he met Governor Branstad.

Fast forward to 2012, then-Vice President Xi Jinping, who is about to become president goes back to Iowa, goes back to some of those roots, saying that his time in Iowa really shaped his vision of America. For Governor Branstad, he was in China last month on a special trade mission. So, these two men really know each other. They call each other old

friends. That is something that could come handy moving forward. Given the propensity of the president-elect to really go after China on issues like currency manipulation, on issues like military expansion in the South China Sea, the relationship with the United States and China is one that is fraught with challenges.

And this personal relationship that you see between President Xi and Governor Branstad might make it that much easier for these two governments to try and negotiate differences -- John.

BERMAN: The president-elect already offering both the carrot and the stick to China going on.

[4:35:03] It will be interesting to see how this relationship develops.

Matt Rivers, great to see you. Thanks so much.

KOSIK: OK, let's dig in a little bit on that Donald Trump tweeting fest of him lashing out at union leader who criticized the carrier deal as a promise halfway delivered.

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CHUCK JONES, PRESIDENT, UNITED STEELWORKERS LOCAL 1999: We had a lot of the members when the word was coming out of 1,100. They thought they would have a job. Then, they find out the next day after or next Friday, that most likely they weren't. The 550 were still going to lose their jobs.

(END VIDEO CLIP)

KOSIK: OK. So, just after a few minutes after the interview, Trump tweeted, quote, "Chuck Jones, who is president of the Steelworkers 1999 is doing a terrible job representing workers. No wonder companies flee country."

Then, an hour later, another tweet. "If United Steelworkers 1999 was any good, they would have kept those jobs in Indiana."

OK. So, here are the facts. Initially, Carrier planned to move 1,400 jobs to Mexico. Carrier and Trump, yes, they struck a deal. They said would save 1,100 jobs. But 300 of those are administrative and engineering positions that were never at risk of moving to Mexico.

So, if you count in total, 800 factory workers would have lost their jobs. They're going to stay employed. Those were saved.

So, bottom line here, Carrier is still shifting about 600 jobs to Mexico some time next year. So, you know, Trump saved 800. There are others that are moving. That is what the steelworkers president is upset about.

BERMAN: No. And now, people are talking about the fact that Donald Trump called out this man by name overnight. Chuck Jones, this union leader says he is now receiving death threats as a result of all of this. It's a very interesting back and forth.

Carrier deal is a fascinating thing. It's a microcosm and it raises a lot of questions of successes Donald Trump will have and at what cost, too. It is an important discussion.

KOSIK: And interestingly enough, a lot of people in the union, meaning also the members, those were some of the people who voted for him.

BERMAN: Sure, yes, and he did save 800 jobs, but not all the jobs he said he did.

KOSIK: Yes.

BERMAN: All right. A day after the president-elect threatened to cancel an order to buy at least two new Air Force One jets, the head of Boeing promised Donald Trump that the aircraft maker will work to control costs. Now, the president-elect's tweet on Tuesday said that the costs of the new Air Force One is out of control. He also said cancel order.

And he also said that in a statement, he spoke to the press and said that Boeing shouldn't make as much money.

But after Boeing CEO Dennis Muilenburg and President-elect Trump spoke on the phone, Boeing said it would work with the administration and the president-elect said, quote, "We're going to work it out."

KOSIK: A federal judge has halted the recount of votes for president in Michigan. One of three battleground states where Donald Trump narrowly beat Hillary Clinton. Lawsuits seeking recounts in Michigan, Pennsylvania and Wisconsin were filed by Green Party candidate Jill Stein. District Judge Mark Goldsmith says Stein's suit raised serious issues, but that she offered no evidence of tampering or mistakes.

BERMAN: The vice president appears to be throwing cold water on the very hot water he created about a possible 2020 White House bid. Joe Biden raised eyebrows this week when he said or maybe he was just joking that he planned to run for president in four years. He even told Stephen Colbert never say never.

Yesterday, he seemed to walk those comments back. Maybe. He told reporters, "I have no intention of running." Now, I will just say, no intention is not no. No intention is I will never run for president, it's just that I don't intent to.

KOSIK: Continues to float the idea.

BERMAN: I think he's floating. I think he's floating. Now, look, Joe Biden basically says he just never know what's going to happen. Why would I ever just say no, not ever, because you're never going to be in for you.

KOSIK: Politicians never close the door, do they?

BERMAN: He's learned a lot of lessons KOSIK: All right. Before the elections, stock market experts predicted a thousand-point drop on the Dow if Donald Trump won the election. Well, guess what? Now the exact opposite is happening. The Dow is up more than 1,200 points or 7 percent since the election.

It's now less than 500 points away from the 20,000 mark. Some traders told me yesterday, they think it's going to get to 20,000 by the end of this month. OK, we'll see. We'll see about that.

Almost 300 of those coming yesterday, just yesterday, with the Dow closing at a record high. The S&P 500 also hitting a high. The NASDAQ is now just one small gain an away from its own record. And we are seeing futures pointing slightly higher this morning.

Investors think a Trump presidency will mean faster growth and less regulation and lower taxes. Even Trump himself can't stop the rally. He told "TIME" magazine yesterday, he wants to bring down prescription drug prices. That sent pharmaceutical and biotech stocks lower, including these three you see here, which were the only losers on the Dow yesterday. But you know what? It had little impact on the broader market which is insistent upon charging forward.

[04:40:01] BERMAN: Yes. I mean, you know, a lot of positive signs in the economy right now. Which is contributing to that and plus, what a lot of investors think Donald Trump will do with infrastructure spending and tax cuts and deregulation. They like that for now.

KOSIK: Pro-growth policies.

BERMAN: For now.

All right. Adding -- well, in the aftermath of the deadly Tennessee wildfires, prosecutors now say the flames did not start by accident. New details when EARLY START continues.

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BERMAN: Two teenagers are facing aggravated arson charges in connection with the deadly Tennessee wildfires. Now, because they are minors, police are not releasing identities. Right now, they are being held in a juvenile detention center. But this case could move to an adult court and more charges could be filed.

Let's get the very latest from CNN's Polo Sandoval.

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POLO SANDOVAL, CNN CORRESPONDENT: Hey, John and Alison. Good morning.

[04:45:00] Officials there in Tennessee will only say that these two are juveniles, that are from Tennessee, but not from Sevier County. Tennessee which is a region that was heavily scorched by those wildfires, started about two weeks ago, and eventually spread to nearby town of Gatlinburg, Tennessee. The two juveniles arrested yesterday according to investigators as part of this arson case that's been worked by local, state and federal investigators.

Local district attorney James Dunn (ph) saying that they do believe that other charges are possible. According to him, they are keeping all of their options on the table. And that includes seeking the transfer of these cases to an adult criminal court. You recall, 14 people lost their lives. Nearly 1,400 structures there in Tennessee either damaged or destroyed after this fire.

We had an opportunity to travel to Gatlinburg, Tennessee, to see the devastation for ourselves. You could see just smoldering rubble that all that was left of what is typically very picturesque, very scenic area there in eastern Tennessee. Recent heavy rains actually helped those firefighters finally gain the upper hand in taking out, extinguishing the flames.

And now, residents are beginning to rebuild their lives. They've been able to access the region already for several days that the general public will access Gatlinburg come on Friday as the investigation presses forward with two juveniles behind bars -- guys.

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KOSIK: All right. Thanks very much, Polo Sandoval.

Disturbing details are emerging in that Oakland warehouse fires that killed 36 people. City officials say it had not been inspected the warehouse in more than 30 years. They say there had been no request for construction permits in that time, but records show there were repeated complaints over the years about the warehouse. Many of them about trash piling up in the empty lot next door. This comes as investigators found the warehouse had a makeshift stairwell, no smoke detectors or sprinklers, and no exits to the street from the second floor.

BERMAN: A dramatic day in court as the Dylann Roof murder case gets under way. The 22-year-old is accused of killing nine people last year during a bible study class at Emanuel AME Church in Charleston, South Carolina.

Prosecutor prosecutors described him as cold and calculating. One of the shooting survivors called Roof "evil" in tearful testimony.

Let's get the latest from CNN's Nick Valencia.

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NICK VALENCIA, CNN CORRESPONDENT: John and Alison, Wednesday's court proceedings begun with 67 prospective jurors being whittled down to 12 jurors and six alternates. We also heard opening statements from both the prosecution and defense. Dylann Roof sat mostly emotionless and expressionless. His eyes trained downwards. His hands clasped in his lap as the prosecution laid out their case as to why they believe he should be found guilty in this federal hate crime charge.

Earlier, I spoke to State Senator Marlon Kimpson about his reaction to what he saw in Wednesday's courtroom. STATE SEN. MARLON KIMPSON (D), SOUTH CAROLINA: It's sad. What we

have to do is not just cry about it. We've got to do something about it. He's a ninth grade drop out, very little hope, bases his whole life existence on racism.

Now, as odd as that seems to you and I, there are people in the country who are Dylann Roofs. There are more Dylann Roof out there. What we have to do as a nation is recognize the next one early on.

VALENCIA: According to the source inside the courtroom, Dylann Roof's mother collapsed during the lunch recess and had to be transported by EMS. Wednesday's court proceedings also saw the first witness called to the stand, Felicia Sanders, one of the survivors of that attack of June 2015, she had to take a break as well. Some of the most gut- wrenching, heart-wrenching testimony we heard throughout -- John, Alison.

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BERMAN: All right. Nick Valencia, thanks so much.

Former astronaut and U.S. Senator, John Glenn, is in the hospital. A spokesman confirmed the 95-year-old was admitted more than a week ago to the hospital on the campus of Ohio State University. At this point, it's not clear what his condition or his illness is. Senator Glenn did suffer a stroke back in 2014 after undergoing heart valve replacement surgery.

Again, you know, what a life Senator Glenn has led. You know, two trips to space. He went back up in the space shuttle as the oldest person ever to go to space after being the first American to orbit the earth. A true American hero. We wish him the best.

KOSIK: We wish him the best, 95 years young.

All right. Switching gears. Delta Airlines may bring back an old staple of air travel. But how will customers respond?

BERMAN: Staple, it's so funny. I don't want to give away the tease.

KOSIK: I know. We're going to tell you what they will be testing right after this break.

BERMAN: Radical, it's a radical motion.

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[04:53:44] KOSIK: Most of Aleppo is back in the hands of the Syrian regime. Neighborhoods in the eastern part of the city, once a rebel stronghold are now flattened. Bodies can be seen lining the streets and remaining opposition forces are now proposing a five-day cease- fire. Syrian President Bashar al Assad says those rebels and the United States are, quote, "begging for a truce."

CNN's Jomana Karadsheh is tracking the latest developments live from Amman, Jordan. So, Jomana, we are seeing Secretary of State John Kerry, his Russian counterpart, they re trying to negotiate a cease-fire? What's the likelihood of that actually happening?

JOMANA KARADSHEH, CNN CORRESPONDENT: Well, Alison, they did meet in Germany yesterday for about 45 minutes, discussing the situation in Aleppo. No agreement was reached. They are scheduled to meet again at some point this morning.

Now, it's very unlikely that we're going to see any sort of a truce or a cease-fire really coming out of this. It is probably more of a humanitarian kind of agreement, a longer term for the situation in Aleppo. You know, when you look at the position of the Syrian regime and Russian allies, they're really not in a position to agree to a truce. They feel they are on the verge and it seems they are on the verge of capturing the rest of eastern Aleppo.

[04:55:01] So, they are negotiating from a position of strength here.

Now, this sort of agreement would be something looking at humanitarian evacuations, allowing aid into the city. And, of course, they're discussing here an idea that the U.S. floated last week, which is providing safe passage for the rebels of eastern Aleppo to be moved out to other parts of the country that are rebel held. We are hearing from the Russians that they agree to this proposal.

So, it seems at this point, Alison, the rebels are on the verge of defeat. It's just a question of how will this defeat look? Will they surrender and move out of eastern Aleppo or will they make a last stand and fight until the end?

KOSIK: All right. Even if there's no ceasefire agreement, humanitarian aid and humanitarian agreement, those civilians I'm sure would take it at this point.

Jomana Karadsheh, thanks so much.

BERMAN: ISIS released a new propaganda video featuring one of the last known Western hostages. The footage shows British journalist John Cantlie standing in hard hit Mosul, at a site of an apparent coalition airstrike.

In a statement that certainly seems coerced, he describes how allied forces are hurting residents with nonstop attacks. Cantlie has not been seen since the video appearance five months ago. He was taken captive four years ago with fellow U.S. journalist American James Foley.

KOSIK: All right. Let's get a check on CNN money stream this morning.

The Dow and S&P 500 have never been higher, both hitting records at Wednesday's close. Futures are up slightly. Stock markets in Europe are rising. And shares in Asia posted solid gains overnight.

So, since the election, the Dow has surged, count them up, 1,200 points. That's 7 percent. It's really an incredible run up especially when you consider all of the predictions were for a huge drop if Trump won. That didn't materialize. So, for the year, the Dow is up more than 12 percent for the year.

So, if something happened to you or your job, could you come up with $2,000 to pay for it? Well, new research shows the average American aged 40 or under, say there is a 47 percent chance they would not be able to come up with $2,000 next month. That's if there is an emergency. That is the lowest level this year. And this is according to the New York Federal Reserve.

Now, it shows the divide in the economy. The economic numbers are positive. Unemployment is low. Consumer confidence is high. And the economy is growing. Many younger Americans are just not feeling it. They're feeling the recovery.

Delta could bring back a major perk and it is radical. Are you sitting? Free meals in coach. Whoa.

The airline is testing the service flying between New York and Los Angeles or San Francisco.

All right. So, what is on the menu? Morning flyers could be offered a honey maple breakfast sandwich. Yum. For afternoon travelers, a smoked turkey sandwich. Am I making you hungry? That would be a sandwich once again, or a whole grain veggie wrap.

Delta will decide this year whether or not to make the meals standard. Now, free perks like entertainment is next. They have been coming back as airlines try to lure more flyers back on planes and boost their profits. But earlier this week, interestingly, enough, United Airlines begun charging some passengers to actually use the overhead bins.

BERMAN: I think what people should do is take the free food and put it in the overhead bin. Look, I think the free food is great thing particularly on a longer flight. I think people need to It is nice not to have to pay for it on the longer flights. Those meals, they sound pretty good.

KOSIK: I definitely agree.

BERMAN: And they should give us free overhead, too.

KOSIK: Yes.

BERMAN: EARLY START continues right now.

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KOSIK: Donald Trump tapping an ally of big oil and climate change denier to head up the EPA, and also making some other key picks.

BERMAN: All right. Indiana union leader claims he is receiving death threats after accusing Donald Trump of, you know, baking the books, making up some numbers on how many jobs he saved at Carrier. Now, the president-elect has very harsh words for this man.

Good morning, everyone. Welcome to EARLY START. I'm John Berman.

KOSIK: And I'm Alison Kosik. It is Thursday, December 8th. It's 5:00 a.m. in the East.

And breaking overnight, the battle between the next leader of the free world and the leader of United Steelworkers Local 1999. President- elect Trump rips the blue collar boss who said Trump exaggerated the number of jobs that were saved at the Indiana air conditioning plant. We will have more on that back and forth, and the numbers behind it coming up in just a bit.

Also today, the president-elect gets ready to sit down with retired four-star Admiral John Stavridis who is said to be on the short list for secretary of state. Noteworthy about that meeting is that Stavridis was vetted as a possible vice president pick for Hillary Clinton.

Overnight, the transition team announces the pick for the head of the Environmental Protection Agency, Oklahoma Attorney General Scott Pruitt. Now, this will be a highly controversial nomination. Pruitt is a prominent denier of climate science and a fierce critic of the agency he would actually now run.